1. Field of the Invention
The present invention is in the field of electronic transfer of monetary values using smart card technology wherein a credit card sized card includes internal electronics or other circuitry enabling the card to receive and store data representing monetary values and to selectively transfer data to another device to effect the transfer of all or a portion of the stored monetary values.
2. Description of the Related Art
Credit cards are commonly used in monetary transactions wherein the owner of a credit card presents the card to a vendor (either a person or a machine), and the vendor provides the credit card owner with something of value (e.g., a product, airline tickets, a room in a hotel, a meal, etc.). The typical credit card is a passive device that includes human readable characters embossed or printed on one side to identify the credit card owner and the owner""s account number. Generally, credit cards also have a magnetic stripe on an opposite side. The magnetic stripe can be automatically xe2x80x9creadxe2x80x9d by a credit card reader so that the credit card information (i.e., the owner""s name and account number) can be transferred from the card to a data processing system (e.g., to the credit company via a telecommunications system). After verifying that the credit card information is valid, that the credit card owner has an acceptable account balance, and that the credit card has not been reported stolen, the data processing system typically sends an authorization message to the vendor informing the vendor that the transaction can proceed. Eventually, the credit card owner receives a bill from the credit card company that includes the amounts of completed transactions that the credit card owner must pay to the credit card company. During the entire process, the credit card itself is not modified, nor is the information on the magnetic stripe modified.
Unlike credit cards, xe2x80x9csmart cardsxe2x80x9d include electronic circuitry or other circuitry that enable the smart card to actively participate in a financial transaction. A smart card can include an electrical connection, an optical coupler, a magnetic coupler, an RF coupler, or other data transfer interface, to enable the smart card to transfer data to and receive data from another transaction device, such as a vendor""s point of sale (POS) terminal, an automatic teller machine (ATM), a computer interface, a telephone interface, an internet connection, or the like. Typically, a smart card includes internal memory for storage of data and includes an interface for transferring data to and from the memory. In addition, the smart card may include internal processing capability to enable the smart card to engage in more complicated data transfer transactions, such as, for example, transactions which require the smart card owner to enter a personal identification number (PIN) or transactions which require the smart card and the other transaction device to perform a security algorithm (e.g., an exchange of passwords) before proceeding with a transaction. The smart card may advantageously include a keyboard to enable the smart card owner to enter identification information and to enter transaction amounts. For a more detailed discussion and overview of smart card technology, see, for example, P. L. Hawkes, et al. (Eds.), Integrated Circuits Cards, Tags and Tokens, New Technology and Applications, BSP Professional Books, (ISBN 0-632-01935-2), 1990.
One typical use for a smart card is as a replacement for cash. Rather than entering into a number of credit card transactions and then receiving a consolidated bill from the credit card company on a monthly basis, the owner of a smart card purchases funds (i.e., monetary values) that are stored in the memory of the smart card. Then, when the smart card owner engages in a financial transaction (e.g., a product purchase, or the like), a portion of the monetary values is electronically transferred to another device (e.g., a point of sale terminal), and the transferred monetary values are deducted from the smart card memory. Thus, the smart card is used in a similar manner to the use of cash. Depleting the monetary value in the smart card memory has the same effect as depleting the cash in a wallet or purse. When the monetary value is low or is entirely depleted, the smart card owner must return to a bank or to an appropriate terminal (e.g., an ATM terminal) to have the smart card recharged with the data equivalent of cash just as the user of cash must return to the bank or ATM to obtain more cash. See, for example, U.S. Pat. No. 5,884,292, which is incorporated by reference herein.
Although smart cards have the advantage of providing a convenient way of engaging in cash-free financial transactions, the smart cards have the disadvantage of not being as flexible as cash. In particular, a business person, a shopper or a traveler operating on a cash basis has the benefit of obtaining cash in many denominations. When a large amount of cash is desired, a portion of the cash is obtained in large denominations and a portion of the cash is obtained in smaller denominations. Furthermore, unless the cash holder is expecting a particularly large cash transaction on a particular day, the cash holder will likely keep only a portion of the available cash on his or her person so that all the cash will not be subject to being lost or stolen at the same time. The remaining portion can be kept in a home, office or hotel safe until needed. The owner of a typical smart card does not have this advantage. If a smart card having a stored data value representing a large monetary amount is lost or stolen, the entire amount is gone, as if the smart card owner had lost a wallet with all the cash in the wallet. The smart card owner could decide to carry a number of smart cards with varying cash values stored therein, but such a decision basically returns the smart card owner to the previous situation of having a large number of monetary devices rather than being able to carry only a single device. Another option is to carry a smart card having a smaller monetary value, but this option requires the smart card owner to return to the bank or ATM more frequently and does not provide the smart card owner with the flexibility of varying the monetary value in the smart card in response to varying needs (e.g., a last minute purchase of a ticket, car repairs while on vacation, etc.).
In view of the foregoing, there is a need for a smart card system that would enable the smart card owner to have the benefit and flexibility of cash while retaining the small size, convenience and security of the smart card technology.
The present invention is directed to a system which provides the convenience and flexibility of cash and which also provides the security and ease of carrying a smart card. In particular, the present invention permits the owner of a smart card to vary the monetary value stored in a particular smart card without requiring the owner to return to a bank, an ATM, or the like. The smart card system in accordance with the present invention provides the ease and immediacy of use of cash and allows transactions to occur between two smart cards. The system described herein uses smart cards capable of both credit and debit functions.
The present system is based upon a smart card capable of immediately effecting monetary transactions between individuals or between two cards owned by the same individual by crediting monetary value to the memory of a first smart card while debiting monetary value from the memory of a second smart card. The monetary transaction preferably occurs by directly interfacing the first smart card with the second smart card. By providing this capability of transferring the monetary value directly from one smart card to another smart card, a system of such cards provides the equivalent of cash and can replace the use of cash for many transactions. In particular, by engaging the first smart card with the second smart card, a predetermined amount of money is transferred between the two smart cards, such that the monetary value of one of the smart cards is increased and the monetary value of the other smart card is decreased by the appropriate amount. In this manner, an individual can also transfer a sufficient amount of money from a first smart card having a large stored monetary value to a second smart card having a small stored monetary value, store the first smart card in a safe location and carry the second smart card for use in monetary transactions. In like manner, two individuals can transfer monetary values from one individual""s smart card to the other individual""s smart card. For example, a passenger in a taxi can transfer monetary value to the smart card of the taxi operator rather than requiring the taxi operator to have a commercial transaction device in the taxi. As another example, a parent can transfer a limited monetary value from the parent""s smart card to a child""s smart card so that the child will have sufficient funds for school, for a trip to the mall or for an evening at the movies, but not have a large monetary value in the smart card that can be lost, stolen or misspent. It should be noted that because a smart card generally has value only to the person knowing the personal identification number, there is less incentive for a thief to steal a smart card.
In addition to the smart card to smart card transactions unique to the present invention, the smart cards are also able to engage in conventional monetary transactions with commercial establishments, vending machines, slot and other gaming machines, ATMs, highway toll booths, and the like, as well as other entities via electronic commerce (e.g., internet commerce). Such transactions may also be made involving different currencies, such as the dollar and the pound or Euro. Dollars transferred to a smart card operating on a pound (or Euro) system may be stored as dollars, or, in the alternative, the dollars may be converted to pounds before storing if an exchange rate is factored into the transaction.
A particular aspect of the present invention is that xe2x80x9chigh valuexe2x80x9d cards (e.g., the parent""s card in the foregoing example) can be linked with xe2x80x9clow valuexe2x80x9d satellite cards (e.g., the child""s card), such that the monetary value represented by such a satellite card can be repeatedly replenished as needed by interfacing with the xe2x80x9chigh valuexe2x80x9d card, each such interface effecting the transference of monetary value from the xe2x80x9chigh valuexe2x80x9d card to the xe2x80x9clow valuexe2x80x9d satellite card. As a further example, a person traveling might want to have access to a larger sum of money throughout the person""s travels (e.g., many thousands of dollars). However, the person would not want to carry the large sum on a daily basis such that the entire sum could be lost or stolen at one time. The traveler would initially transfer a significant monetary value to a xe2x80x9clarge valuexe2x80x9d card. From such a xe2x80x9clarge valuexe2x80x9d card, a few hundred dollars could be transferred to the xe2x80x9clow valuexe2x80x9d satellite card to spend in connection with enjoying a business dinner, a shopping expedition, or the like. Because the satellite card can operate in both the debit mode and the credit mode, the traveler can transfer monetary value into the satellite card from other sources. For example, if the traveler is in a city having gambling and the traveler wins, the traveler""s winnings can be transferred to the satellite card. When the traveler returns to his or her hotel room, the increased monetary value of the xe2x80x9clow valuexe2x80x9d satellite card can be transferred to the xe2x80x9chigh valuexe2x80x9d card, thereby reducing the monetary value of the satellite xe2x80x9clow valuexe2x80x9d card for further use. The use ofxe2x80x9chigh valuexe2x80x9d and xe2x80x9clow valuexe2x80x9d cards results in added security because the traveler would not lose immediate access to the larger monetary value if the xe2x80x9clow valuexe2x80x9d card is lost or stolen. Also, such a system provides the opportunity for the traveler to budget or limit the use of his or her funds by not having the traveler""s entire funds immediately available.
The smart cards in accordance with the present invention include security features similar to the security features found on other smart cards being used in place of cash. Such security features include the use of personal identification (or PIN) numbers, fingerprint identification, holograms, silicon sensor technology, social security numbers, passport numbers, voiceprint, and all such security methods in accordance with the available art.
Current technology is available to effectively manufacture the cards described herein. Credit card sized smart cards are available that have the appearance of calculators, that are solar powered, and that have key pads and luminous numbers for readouts. Such smart cards utilize low cost, high density digital storage capacity of integrated circuit memory chips and include processing logic that handle data transfer transactions as well as the necessary security interface. Similarly, magnetic discs and cards and optical discs and cards may also be advantageously used. In accordance with one aspect of the present invention, one part of the card processing logic manages credit transactions and another part of the logic manages debit transactions, with either part capable of communicating with the opposite counterparts of a second card in order to complete a transaction. Alternatively, a common processing logic manages both types of transactions.
As discussed above, any type of data transfer technology may be used to communicate between two smart cards. In particular, the technology presently used to transfer from a smart card to another type of device (e.g., a point of sale terminal, an ATM, or the like) may be used. For example, direct electrical interconnections, magnetic coupling and optical coupling can be used to provide communication between two cards.
One aspect of the present invention is a smart card that stores monetary values and selectively transfers monetary values to and receives monetary values from a compatible smart card. The smart card includes a data storage device that stores data representing monetary values. Control circuitry controls the transfer of the monetary values into the data storage device and controls the transfer of the monetary values out of the data storage device. A data transfer interface couples directly to an interface on the compatible smart card to enable data to be transferred between the smart card and the compatible smart card.
Another aspect of the present invention is a system for electronic transfer of monetary values that includes first and second smart cards. Each of the first and second smart cards includes a data storage device that stores data representing monetary values. Control circuitry in each smart card controls the transfer of the monetary values into the data storage device and controls the transfer of the monetary values out of the data storage device. A first data transfer interface on the first smart card couples directly to a second data transfer interface on the second smart card to enable data to be transferred between the first and second smart cards.